It wasn’t long ago that cryptocurrency didn’t exist in any type of viable form. Sure there were many attempts to get some form of cryptocurrency off the ground, but all of them failed for one single reason: double-spending. This is essentially a flaw within a cryptocurrency system that sees the currency being spent twice.
Then in 2009, the game completely changed when Bitcoin announced its arrival. While it wasn’t an arrival that was met with universal acclaim, it was one that solved the double-spend issue. This was achieved due to the implementation of mining and the blockchain.
From this point on, the global view on money started to gradually change. Due to the rapid success of Bitcoin, it opened the gateway to many other different cryptocurrencies. As of today, there are more than 7,000 variants of crypto available.
It may have once been a sideshow to the real economy and financial markets, but make no mistake: cryptocurrency is having a significant effect on the current and future global economic outlook. This article will explore the reasons behind this change.
The concept of cryptocurrency
To understand the popularity of cryptocurrency, it’s important to analyze its overall concept. In general, it supplies properties that traditional money and currencies cannot match. Below are some of the unique characteristics of cryptocurrency, which highlight why ‘digital currency’ is on course to change the financial game and promote economic growth:
- Security: No third-parties or intermediaries are involved, which means you have full control over your assets. Additionally, cryptocurrency is a decentralized digital currency, which means fraud is eliminated due to the transaction process being done in real-time.
- Storage: Crypto only exists in digital form. This means it doesn’t take a physical form like cash or commodities. As a result, cryptocurrency can be moved around with ease via a digital wallet. This wallet can be connected across multiple devices, which makes it particularly portable.
- Anonymity: As your cryptocurrency is stored within a digital wallet, you don’t need to connect this to any distinguishing data. The result: it functions in the opposite way to traditional banks, which know everything from your financial records to personal data.
These are just some of the reasons why the top cryptocurrencies are typically projected to grow significantly over the next few years.
How it is shifting global investments
As mentioned in the previous section, the biggest cryptocurrencies are growing at a rapid rate – and investors are taking particular notice of this upward shift. You only have to look at the success of Bitcoin over the past decade to realize just how quickly the market can explode in value.
Want to gain accurate insights into how they can change, but don’t fancy investing any money yourself? Well, you can use Traders of Crypto, a free to play to crypto trading game, to gain a real-time view into how Bitcoin and other cryptocurrencies are often receiving notable boosts to their value on a day-to-day basis.
Wave goodbye to middlemen
As mentioned already, cryptocurrency transactions don’t involve any intermediary. Instead, transactions are completed in a decentralized manner.
Just this simple aspect is making banking institutions sweat. It removes the requirement for their services from the equation. Not only that, but due to not having to pass through several hands, crypto transactions are generally much faster than their traditional banking counterparts.
The Dollar isn’t required
…Or any traditional national or continental currency for that matter.
When cryptocurrency transactions are completed, these don’t need any type of link to the U.S. Dollar. This means it is possible to engage in the global economy yet circumvent U.S. economic policies at the same time.
When looking at it from a narrow viewpoint, you may believe this is a threat to how the government operates. After all, the U.S. dollar is a reserve currency that covers the global economy. However, this is counteracted by cryptocurrency, enabling more international transactions.
Promotes more overseas transactions
There are countries located across the planet which, due to poor economies, don’t have any form of bank account. With cryptocurrency, however, people in these countries suddenly have an opportunity to connect to the online economy. With the power of a digital wallet, transactions can be made anywhere on the planet – as long as crypto is accepted, of course.
In addition to this, there’s no need to worry about fluctuating currencies. If everyone is using Bitcoin, for example, the rate is the same for everyone. Plus, no processing fees are involved.